Author Topic: Wall Street manipulations  (Read 2101 times)

Offline krissel

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Wall Street manipulations
« on: April 09, 2008, 05:29:44 AM »
I debated whether this belongs here or in the Community section but decided to post here due to its implications not just for Apple stock holders or purchasers but anyone who has a vested interest in the market. Of course that includes anyone who has a 401k, 403b, annuity, pension, municipal fund, etc.

These are long articles that are intended to be part of a book eventually but they are a really good 'exposé' of what has been going on with the business sector, Wall Street, the SEC and the market. Ultimately it affects all of us to one extent or the other and may even more so in the near future.

The blog is written by the head of Overstock.com but is about the manipulation that is occurring in the stock market and how we got to the precipitous situation that exists today. In particular his entries on Jim Cramer and Eliot Spitzer are spot on. It reveals the illegality and gaul that those (and other) people have utilized to blatantly rip off investors at all levels and some of the video links are quite aggravating to see how flippant Cramer is about doing illegal activities.

The writer also describes and explains 'naked shorting' and derivatives so it is more easily understood.

If you don't have time for reading it all now, just save the links or do a Select All on those pages and drag drop a clipping you can read later. It will be worth it.

http://www.deepcapture.com/category/1-the-players/

http://www.deepcapture.com/category/3-regu...apture-the-sec/

http://www.deepcapture.com/category/4-the-...insincere-ious/

http://www.deepcapture.com/category/7-the-...temic-collapse/

http://www.youtube.com/watch?v=772PXNSrSiI

http://antisocialmedia.net/?page_id=61

http://seekingalpha.com/article/71331-nake...mes-full-circle
« Last Edit: April 09, 2008, 05:30:54 AM by krissel »


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Offline Paddy

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Wall Street manipulations
« Reply #1 on: April 09, 2008, 07:24:12 AM »
While I have little doubt that there is all sorts of manipulation going on (just look at "analyst" reports for Apple this week!) but Patrick Byrne IS a bit of a nutcase. Read what he has to say, but realize that he also has an axe to grind, and even his own Dad doesn't agree with him on this.

From Wikipedia:
QUOTE
Byrne's campaign against naked short selling has attracted controversy, including criticism from a number of journalists. In a column in the New York Times in February 2006, journalist Joseph Nocera described Byrne's actions as a "campaign of menace" and as an attempt to silence Overstock.com's critics.[31][32] CBS MarketWatch's Herb Greenberg (who was named in the 2005 lawsuit) has called Byrne the runner-up for Worst CEO of the Year two years running.[33] One of Byrne's claims, that naked shorting can cause heavy dilution of a company's stock by creating sales untied to any specific shares, has been criticized by Wall Street Journal columnist Holman W. Jenkins. Byrne has cited Overstock.com as an example of a company whose shares have been more than 100% sold short in one quarter, but Jenkins suggests that this merely reflects Overstock.com's heavy trading volume and relatively small public float. Jenkins further argues that brokers are inherently cautious in using the practice, due to the high risk of trading shares that are not guaranteed to exist.[34] Byrne has denied that his campaign is primarily about Overstock.com, but others contend that it is an attempt to divert attention from Overstock.com's financial performance, noting that the company has not turned a profit in several years.[35] However, Byrne has received some favorable coverage, and was featured in a Bloomberg Television show on Naked Short Selling, "Phantom Shares"[36], in March 2007.

In March 2006, John Byrne, chairman of Overstock.com and father of Patrick Byrne, said that he was thinking of stepping down in disagreement over the campaign. Referring to it as a "jihad," the elder Byrne said he believed it was taking time away from managing the company. Byrne said, “I'd rather keep my relationship with my son than be the chairman of the board.”[37] In April 2006, John Byrne stepped down to become vice-chairman, and in July of that year he resigned from Overstock's board of directors.


This man is also the author of the "65% solution" - a widely derided (both in educational circles and by such entities as Standard & Poor) campaign to ensure that 65% of all educational spending is spent directly on teachers' salaries and in the classroom. He is also a rabid supporter of school vouchers - NOT a supporter of public education. Having spent many years in North Andover on the forefront of school funding battles, don't get me started on the likes of Patrick Byrne on THAT subject! And he gets really nasty when he doesn't get his way:
QUOTE
Byrne and his family contributed most of the funds in support of House Bill 148 in Utah, a bill that would allow the state to provide funding vouchers for students who decide to leave public schools for private schools.[55] In January 2008, it was reported that Byrne and his parents contributed about $4 million to the pro-voucher campaign, or three-quarters of its $5.4 million funding. Opponents of vouchers spent $4 million. [56] When that bill was soundly defeated in a statewide referendum (62% opposing vs. 38% favoring)[57], the Salt Lake Tribune reported that Byrne "called the referendum a 'statewide IQ test' that Utahns failed." He said, "They don't care enough about their kids. They care an awful lot about this system, this bureaucracy, but they don't care enough about their kids to think outside the box."[


Believe me...Utah parents care a heck of a lot more about their kids than Patrick Byrne does!


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Offline jcarter

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Wall Street manipulations
« Reply #2 on: April 09, 2008, 07:45:00 AM »
WOW,
Realllllllyyyy interesting!
Thank you!   I like investing, but dont really understand the technicalities of it all. I leave that to my husband, so I will forward your links to him.
A book you might enjoy, on a similar subject, is The Creature from Jekyll Island, A scond look at the Federal Reserve, by G. Edward Griffin
Its an eye-opener.
http://tinyurl.com/3hun4j
Jane

Offline Paddy

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Wall Street manipulations
« Reply #3 on: April 09, 2008, 08:28:07 AM »
Well, guys...I don't know (yet) where to go for the straight goods from someone without a conspiracy theory or three in his pocket, but I will keep looking!...Griffith is a card-carrying member of the John Birch Society and a promoter of quack cancer cure Laetrile. rolleyes.gif

BTW - I'm not suggesting that everything he writes is nonsense, not by any means - just suggesting that you read very critically, knowing his background, which is the same thing I'd suggest for Patrick Byrne.

Next?

-----

Sidenote: my husband is reading Liar's Poker at the moment - which he is finding very interesting and has commented that he'd like to know more about how the whole economic system works, beyond the general assumption that it's a whole lot of smoke and mirrors. I'm still looking for something that is (a)readable and (b)not severely biased. Harder to find than one would think!

Tragedy and Hope: A History of the World in our Time looks like it might be an interesting, though perhaps a bit daunting, place to start. (1348 pages, 4.3 pounds!)


"If computers get too powerful, we can organize them into committees. That'll do them in." ~Author unknown •iMac 5K, 27" 3.6Ghz i9 (2019) • 16" M1 MBP(2021) • 9.7" iPad Pro • iPhone 13

Offline jcarter

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Wall Street manipulations
« Reply #4 on: April 09, 2008, 08:45:06 AM »
Yes, Griffin is a bit eccentric, and the Laetrile thing was bogus, but just reading about the Federal Reserve and then looking into it in depth, beyond the book, is really interesting.

And Liar's Poker sure is another great one!  We have lent it, and not gotten it back yet.  My husband has a 'library' here in our house, and sadly, we dont get some back that we lend.  So I just order another copy of whatever is missing.
Tragedy and Hope, I dont think he has this one, so will order it today.
Thanks,
Jane

Oh, another one that is here and good, is Thomas Sowell's "Basic Economics" there are 2 now.
He is a savvy writer, gets us really thinking and looking at things.
So many good educational books around, I spend too much at Amazon,,,,,,,,,,,
Oh, well, my husband just finished a huge horrid plumbing repair job on our house, which would probably cost us $500 if we had hired it done, so see how my brain works,,,,,,,I will go ahead and spend $ on books instead

Offline Paddy

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Wall Street manipulations
« Reply #5 on: April 09, 2008, 09:36:00 AM »
QUOTE
Oh, well, my husband just finished a huge horrid plumbing repair job on our house, which would probably cost us $500 if we had hired it done, so see how my brain works,,,,,,,I will go ahead and spend $ on books instead


I like your reasoning, Jane!! toothgrin.gif
"If computers get too powerful, we can organize them into committees. That'll do them in." ~Author unknown •iMac 5K, 27" 3.6Ghz i9 (2019) • 16" M1 MBP(2021) • 9.7" iPad Pro • iPhone 13

Offline krissel

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Wall Street manipulations
« Reply #6 on: April 09, 2008, 07:57:09 PM »
Ah, but perhaps some axes may need grinding. smile.gif

He may have a cause but he provides plenty of links to backup his statements. A lot if it is how you perceive and believe economics should be conducted. Personally I don't agree with the idea of shorting a stock as a productive means of promoting anything other than to line the pockets of day traders. It does nothing to further the economy in the long run but serves to undermine companies that have solid fundamentals.

Be careful not to throw the baby out with the bath water due to disagreeing with some of his other causes. I certainly don't approve of school vouchers at all but the idea of putting the majority of education funding in the classroom is valid. It's a case of the intention being good but the means stink.

As to Holman Jenkins, well, he has his own metal implements to sharpen. He is known for advocating the things he condemns Byrne for attacking. He is also quick to blame the stockholders for any losses they may sustain while often making excuses for compensation for execs and denouncing regulations on business.

QUOTE
- Get rid of the corporate income tax:

A fraud on taxpayers...

- Deregulate the accountants:...

- Unleash short-sellers:...

- Stop fretting about insider trading: ...


http://www.pairlist.net/pipermail/the-ring...ary/000478.html

http://www.economicprincipals.com/issues/07.04.15.html


Seems everyone has their objectives and that is not surprising. We won't find anyone with whom we totally agree in principle or action. If that were a requirement we would never elect anyone to office.

Hmmm, maybe that's not a bad idea.  Thinking.gif




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Offline Paddy

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Wall Street manipulations
« Reply #7 on: April 09, 2008, 09:37:32 PM »
QUOTE
Ah, but perhaps some axes may need grinding.


True...I just wish the grinders weren't such nutcases in the first place. Makes it a whole lot harder to take them without a 50 pound bag of salt handy. tongue.gif And Jenkins is just plain scary.

As for the 65% solution - anyone who thinks this is a good idea should read this and the linked page, the 65% Deception. http://www.nea.org/65percent/65percent2.html

QUOTE
But the scheme borrows its definition of "classroom" costs from the federal National Center for Education Statistics (NCES) and applies it in a way never intended by NCES or anyone else. The results can be absurd. Spending on football programs, for example, would be allowed, but not on librarians, nurses, counselors, or the buses and bus drivers needed to get kids to school in the first place.


Just so anyone not familiar with school funding in the US is clear - there is remarkably LITTLE spent on actual administration in most school districts. Far, far less than corporate America spends on "administration." In North Andover, all sorts of things were sacrificed to keep spending in the classroom - so we had NO libraries for a couple of years at the elementary and middle school level!
« Last Edit: April 09, 2008, 09:38:42 PM by Paddy »
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Offline krissel

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Wall Street manipulations
« Reply #8 on: April 10, 2008, 02:59:05 AM »
Most of the NEA's argument is based on the idea that they don't want to be told how and where to put the money on any percentage basis and I agree. Each district is a unique situation and decisions should be made accordingly, despite the fact that the 65% is not a limitation but rather a minimum. Money for nurses, etc. would be allowed, just from other areas of the budget. I'm not promoting the plan, just think that the concept of putting funding in the classroom and not in the offices makes sense. The problem is in how it is distributed and each district should be allowed leeway to make that choice, though having some limitations can help to hold down the exacerbation of the tax bite.

In NJ part of the high expense we have in each town is the fact that we have over 600 separate districts that have to have not only their principals, vice principals, supervisors, secretaries, etc.  but also district superintendent, their assistants, secretaries, etc. Then there is also an additional administrative group at the county level. That's part of the reason NJ real estate taxes are so high, the income tax and sales tax just can't cover but a small amount of what is budgeted. There are budget caps in force but since the amount is based on percentages the administrative funding starts from a solid base.

As to the assumption that there is little administrative spending in most districts, well, not in the one where I spent 32 years. We had a very highly paid group of administrators, dozens of whom were earning well into the 6 figures long before I left in 2002. And since I've been gone there have been many more positions added to the ranks, some of whom are labeled as 'support personnel' but in actuality are little more than paper handlers.
I went to a dinner two weeks ago for my principal who was retiring and was shocked to see so many of my former colleagues in positions that took them out of the classroom. There seemed to be a very top heavy group of individuals that were supervisors or heads of this or that.

During my teaching years whenever we had negotiations for a new contract the administrators' union met separately with the board and settled for a handsome percentage salary increase. Then they negotiated with the teachers/support group union. We got what was left over as an offer. I spent time walking a picket line and felt horrible doing it but the administrators had their contract, no worries. We ultimately settled as we usually did but lost several days pay that was never recouped despite the fact that we still taught the full year.

Just for 'fun', I took a look at the budget for the present year. The total cost per pupil is $13,841 in the district and the cost per pupil of 'acknowledged' administrators is over $2000 per pupil. That is nearly 15%.  Maybe it isn't what some of the CEOs are getting but it's far more than is needed to run a good school system.

It's nice to know some districts are keeping the costs down and sacrificing the bloat for the good of the kids. I just didn't see it where I worked. dry.gif
« Last Edit: April 10, 2008, 03:00:41 AM by krissel »


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Offline Paddy

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Wall Street manipulations
« Reply #9 on: April 10, 2008, 09:22:33 AM »
Wow...NJ is completely different from MA!! Most towns in MA have a Superintendent, maybe an assistant super if the town is big enough, principals at each school (unless the town is really trying to save money ...we had a couple of years with a principal running between two schools which is NOT a good situation) and again, if the town is big enough, there might be a business manager and then there would also be some support staff in accounting and a couple of secretaries in the main office. A head of special education, maybe a head of technology/IT who might or might not have some support staff. Some districts are lucky enough to have a school psychologist on staff.

There IS no layer above them - that's it. No county layer - just the state department of education. Really different from NJ, it would appear.

Really small rural towns in MA have amalgamated school districts; they may have a more local elementary school, but generally share a middle and high school.

North Andover's budget for FY2008 (current school year) was $34M for 4,634 students. Of that, from a quick analysis, only $1M went to the central office in staffing and administrative costs. $2.3M was spent on maintenance and operations (which includes heating and electricity and water etc. - for 7 schools), $847K on transportation (busing mandated by the state for kids up to grade 6 who live more than 2 miles from the school - everyone else has to pay $300 per kid directly to the busing company), professional development - $211K, technology $95K, systemwide maintenance and ops salaries $415K...anyone got any quibbles with any of this??? $23M of the budget goes to salaries for teachers, aides, and principals (NA has 7 principals for FY08, with 2 vice principals each at the Middle School and High school - with 1100 and 1300 students approx. each) The principals earn about $100K on average (slightly less for elementary, slightly more for MS and HS - which is pretty much the going rate for these positions; the HS principal has a PhD, the others all have Masters degrees at a minimum)

I've spent literally YEARS analyzing North Andover's budget - we were always looking for ways to save money and put it into teachers' salaries, because class sizes were always an issue. Textbooks were falling apart and years out of date because the hard spending choices had to be made and when it's a teacher in front of the class or a set of new textbooks, which are you going to choose?

Our teachers also earned near the bottom of the scale when compared to surrounding districts; we lost teachers regularly to places that paid better and had lower class sizes.

I wish I could say that North Andover's budget troubles were unusual in MA, but they are/were not. Funding for education in MA is still very much a town-based thing, unless your town is very poor (think Lawrence) in which case the state pays the lions share. Per pupil funding in North Andover from DOE figures, for both regular day and special ed students (ie: the average) is $9,661 for FY07, but that includes almost $6.7M in health insurance funding for active and retired employees that isn't part of the education budget of $32M for FY07 (the town puts that amount in their budget - the state calculates it as part of per pupil spending). If you take that amount out, the per pupil spending is more like $7,175.

Health insurance costs for employees have skyrocketed in the last few years and take a huge bite out of town finances. Generally, town and school staff have a much higher percentage of their health insurance premium paid by the town than they would if they worked in the private sector, although this isn't by any means universal. My husband's company (Analog Devices) paid about the same percentage of our premiums (80% I think - no longer have that info). But given that teachers generally earn LESS than they would if working in the private sector at jobs that required a masters degree (which a large percentage of them have) this is considered part of the deal. It's become much more difficult to lure people into teaching and KEEP them in the classroom than it was - teachers leave the profession in droves after only a few years. Anyway, this is a long and complicated discussion and we're a long way from the original topic! wink.gif

Clearly, things do vary from place to place in the US, and even within MA. There are a few very wealthy towns (think Wellesley or Weston - the "W" towns as we used to refer to them) that have citizens who clearly value education above all else and fund it to the hilt - spending $7K MORE PER PUPIL than NA for 2006. And then there is the relatively well-off town of North Andover that has very little in the way of a commercial or industrial base, with residential property taxes funding just about everything, who don't want to spend a penny more than the bare minimum. Different attitudes - different results.

Here in Ontario, school funding is not tied to the local tax base - it's done on a provincial basis. That generally works much better, though the formula could do with some tweaking at the moment. The school boards here are generally very large - there is one board for the entire city of Toronto - which covers some 553 schools and 275,600 students - and superintendents can have as many as 25 schools to administer. No evidence of administration overload here as far as I can tell!
"If computers get too powerful, we can organize them into committees. That'll do them in." ~Author unknown •iMac 5K, 27" 3.6Ghz i9 (2019) • 16" M1 MBP(2021) • 9.7" iPad Pro • iPhone 13